Does Golden Krust Caribbean Restaurant have the right to audit my business?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
We have the right at any time during your business hours, and without prior notice to you, to inspect and audit, or cause to be inspected and audited, your (if you are a corporation, limited liability company or partnership) and the Restaurant's business, bookkeeping and accounting records, sales and income tax records and returns and other records. You agree to cooperate fully with our representatives and independent accountants we hire to conduct any such inspection or audit. In the event such inspection or audit is made necessary by your failure to furnish reports, supporting records or other information as herein required, or to furnish such items on a timely basis, or in the further event that the audit reveals that you have understated Gross Sales by two percent (2%) or more, you agree to reimburse us for the cost of such inspection or audit, including, without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board and compensation of our employees. The foregoing remedies are in addition to our other remedies and rights under this Agreement and applicable law.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, Golden Krust has the right to audit a franchisee's business. Specifically, Golden Krust can inspect and audit the business, bookkeeping, and accounting records, sales and income tax records and returns, and other records at any time during business hours without prior notice. This applies to the franchisee's business records and the Restaurant's records. The franchisee must cooperate fully with Golden Krust's representatives and independent accountants during any inspection or audit.
If an audit is required because the franchisee failed to furnish reports, supporting records, or other information on time, or if the audit reveals that the franchisee understated Gross Sales by 2% or more, the franchisee must reimburse Golden Krust for the cost of the inspection or audit. This reimbursement covers charges of attorneys and independent accountants, travel expenses, room and board, and compensation for Golden Krust's employees.
This right to audit is in addition to Golden Krust Caribbean Restaurant's other rights and remedies under the Franchise Agreement and applicable law. This means that Golden Krust can pursue other legal or contractual remedies in addition to conducting an audit and requiring reimbursement for its costs. Franchisees should maintain accurate and complete records to avoid audit-related issues and potential financial penalties.